Slower Q1 economic growth spooks market

MANILA, Philippines - The slower-than-expected economic growth in the first quarter prompted investors to dump local stocks, pulling down the bellwether index to a one-month low.

The Philippine Stock Exchange index retreated 1.64 percent or 111.21 points to finish at 6,676.67, also the intraday low. It is the lowest closing for the main index since ending at 6,636.45 on April 29.

For its part, the broader all shares index fell 1.39 percent or 56.55 points to 4,004.09.

“The market took the lower-than-expected first quarter gross domestic product (GDP) result to capitalize on their gains as the numbers were quite disappointing,” said Jonathan Ravelas, chief market strategist of BDO Unibank Inc.

“With the market breaking below 6,700, this puts us in the 6,500 and 6,600 risk,” Ravelas said.

Gab Aguila, an analyst at DA Market Securities, said the stock market declined across the board as the first quarter GDP report surprised investors.

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First quarter GDP grew by 5.7 percent, slower than the 6.5-7.5 percent full year target set by the government and below the median estimate of 6.4 percent, as the economy continued to feel the lingering effects of disaster that hit the country last year.

Again, the local bourse shrugged off the uptick in Asian markets that are banking on the easier monetary policy from the European Central Bank.

On Wednesday, Wall Street took a breather from several days of posting record highs. The Dow Jones industrial average eased 0.25 percent o 42.32 points to close at 16,633.18, while the broader Standard & Poor’s 500 index slipped 0.11 percent or 2.13 points to 1,909.78.